Waste Connections Beats Revenue by 16.2%, Talks 2022 Outlook

Waste Connections, Inc. (WCN) announced its results for 4Q21 and its positive outlook for 2022. On today’s earnings call, the WCN management team talked about proactively battling inflation challenges, organic growth, its acquisition activity and sustainability projects.

Some highlights include:

"2021's results are a reflection of how a culture of commitment and accountability to all stakeholders enabled us to excel in a challenging operating environment, overcome inflationary pressures and supply chain issues, execute our growth strategy, expand margins, support employee health and welfare, and position the Company well for 2022 and beyond.  The year ended on a high note, as strong solid waste organic growth and acquisition activity, along with continuing underlying margin expansion, drove Q4 financial results once again above expectations.  We are also extremely pleased with our results for the full year, as adjusted EBITDA margin expanded 70 basis points.  Moreover, we delivered 20% growth in adjusted free cash flow to $1.010 billion, in spite of capital expenditures up 25%, as we continued to reinvest in and grow our business," said Worthing F. Jackman, president and CEO. 

"Acquisition activity accelerated in the fourth quarter, resulting in approximately $400 million in acquired annualized revenues in 2021 and setting up acquisition contribution approaching 6% in 2022, including transactions completed year to date.  Along with solid waste pricing growth of about 6.5%, this already positions us for double-digit percentage growth in revenue, adjusted EBITDA and adjusted free cash flow in 2022. Additional acquisitions expected to be completed during the year, improvement in commodity-driven revenues and E&P waste activity, or moderation of inflationary trends would provide incremental benefit."

Jackman continued, "The strength and consistency of our results reflect the durability of our market model and the benefits of an intentional culture focused on employees and value creation.  Proactive pricing, along with a step-up in capital expenditures and over $1 billion in acquisition outlays in 2021, positions us for continued double digit growth in 2022, while preserving the balance sheet strength and flexibility to capitalize on another potential above average year of acquisition activity, invest in sustainability-focused growth projects and increase return of capital to shareholders."

The management team highlighted its continued focus on sustainability projects that will have valuable payback. Jackman noted that the company has 15-20 projects in various stages of development that will come to fruition over the coming years.

Waste Connections maintains its goal that it will continue its focused path toward acieving $10 billion or more in revenue.